How to Remove a Name from a Mortgage | No

Re!nance Option
By: Pete Gerardo Updated By: Aleksandra Kadzielawski
February 9, 2023 - 12 min read

Breaking up (with your mortgage) is complicated

You’re parting ways with a spouse or co-mortgage borrower. You’ve agreed who will keep the
house and take over the mortgage payments. But there’s still a problem. How do you remove
someone from a mortgage?

In the eyes of your mortgage lender, those “ties that bind” aren’t legally severed until you
remove your ex from the mortgage. The good news is that there are a few ways to do it.

The best one is usually to re!nance, which may be less of a hassle than you think.

Here’s what you should know.

Check options to remove a name from your mortgage. Start here (Mar 26th, 2023)

In this article (Skip to...)

Why remove a name?

Re! to remove a name
Remove a name without re!nancing
Selling the home
One more (risky) option
Remove a name from the deed
FAQ

Why remove your ex’s name from the mortgage?

You and your ex-partner might agree on who will keep the house and take over the mortgage
payments.

Check options to remove a name from your mortgage. Start here (Mar 26th, 2023)

But since you quali!ed for the mortgage together, you’ll both stay on the loan until it is paid o"
or altered. That means both ex-spouses remain on the hook for loan repayment — even if one
spouse is removed from the deed.

As a result, the lender can come after either or both of you in the event of a default. And both
of your credit scores will take a hit if your payment is late.

The only legal way to take over a joint mortgage is to get your ex’s name o" the home loan.

Same goes for any co-signer who no longer wants to be on the line for a mortgage they co-
signed. If you need to remove your name, or someone else’s name, from a mortgage, here are
your options.

Re!nance to remove someone from a mortgage

Re!nancing is the best way to take a person’s name o" a mortgage. Depending on your lender,
it may be the only way.

Verify your re!nance eligibility. Start here (Mar 26th, 2023)

If you have su#cient equity, credit, and income — and your ex-partner agrees to give you the
house — you should be able to re!nance your current mortgage in your name only.

Re!nancing means you get a new mortgage to pay o" your current one. To qualify for a
re!nance loan, you’ll need to show the lender you have a strong enough credit history, and
enough monthly income to make mortgage payments on your own.

Do I qualify for a re!nance loan?

Guidelines vary by loan program and lender, but re!nancing a mortgage typically requires:

A new loan that’s 80% or less of the property value

A credit score of at least 620 (conventional and VA loans) or 580 (FHA loans)
A debt-to-income ratio below 45%
Steady employment and income

Those last two requirements could be the toughest to deal with. If you weren’t the main
breadwinner in the home, you may not have enough income to qualify for the loan on your
own.

But here’s a tip: If you will receive alimony or child support, give your lender those details. That
income may help you qualify for the re!nance without relying on a family member to co-sign.

Use a Streamline Re!nance to reduce time and cost

If you have an FHA or VA home loan, you may be able to use a Streamline Re!nance to remove
a co-borrower’s name from the mortgage.

Verify your Streamline Re!nance eligibility. Start here (Mar 26th, 2023)

Streamline Re!nancing typically doesn’t require income or credit approval, and you don’t need
a new home appraisal. These loans often close faster and cost a bit less than a traditional
re!nance.

However, if you want to remove your ex-spouse’s name from the mortgage using a Streamline
Re!, the lender may need to pull your credit report. It depends on your situation.

The FHA Streamline may allow you to remove a name without credit and income
veri!cation if the remaining borrower can prove they’ve made the past six months’
mortgage payments or more on their own. If they can’t prove they’ve been making
payments on their own — or that they assumed the loan at least six months ago —
they’ll have to re-qualify for the new mortgage
The VA Streamline Re!nance (a.k.a. VA IRRRL) may allow you to remove a name
without credit re-veri!cation. But the person remaining on the loan must be the
VA-eligible veteran — not a non-VA-eligible spouse

USDA loans also have a Streamline Re!nance option. However, if you use the USDA Streamline
Re! to remove a name from the loan, the remaining borrower will need to re-qualify for the
loan based on the borrower’s credit report and income.

Pros and cons of re!nancing to remove someone from

a mortgage
The obvious downsides to re!nancing are the time and cost involved.

You’ll typically need to complete a full mortgage application, supplying documents like W2s and
pay stubs to support your !nancial information. Closing on a re!nance loan typically takes
around a month.

And there are closing costs to pay. Re!nance closing costs typically range from 2% to 5% of the
loan amount, which is no small sum if you have a large outstanding loan balance. If you still
owe $200,000 on the home, closing costs could run between $4,000 and $10,000.

But there are ways to get around closing costs — and it’s possible your new re!nance loan
could save enough money to justify the expense of closing costs.

How to remove someone from a mortgage while saving money

Aside from removing a borrower’s name, there may be bene!ts to re!nancing your home.

Re!nancing o"ers a chance to hit the reset button on mortgage debt. Your new loan could o"er
something your current loan doesn’t, like a lower interest rate or a chance to cancel mortgage
insurance premiums.

Let’s explore some of these possible advantages:

Shortening your loan’s term

Even if you’re well into your loan term, you don’t have to start over at 30 years.

You could potentially re!nance into a 20-, 15-, or even 10-year loan term to pay o" your house
on schedule — or sooner than originally planned.

Just note that a shorter term will have higher payments, which you will pay on your own. But
shorter terms will usually save thousands in long-term interest.

Lengthening your loan’s term

Lengthening your loan term spreads the debt across a longer period of time, and doing this can
lower monthly payments. Sometimes it can reduce them signi!cantly, relieving a lot of stress on
your budget.

But in return, you’ll pay more in interest throughout the life of the loan because the lender has
more time to charge interest.

Reducing the loan’s mortgage rate

Now that rates have returned to historic norms, getting a lower mortgage rate is harder to do.
But some borrowers still have room to improve their rate.

For example, if you and your ex-spouse bought the home at a time rates were high, you may
qualify for a lower rate now. Or, if your credit score and income are higher now than when you
closed the current loan, you may qualify for a lower rate.

Eliminating mortgage insurance

Depending on your current loan type, a new loan could save money by eliminating the need for
mortgage insurance.

FHA and USDA loans, which are popular with !rst-time home buyers, normally charge
permanent mortgage insurance fees. When you re!nance into a conventional loan with 20%
equity in the home, you won’t need mortgage insurance. This could save hundreds of dollars
per month.

“Cashing out” the spouse

There’s a chance you’ll need to “cash out” your spouse, meaning the court orders you to pay
your ex a percentage of the home’s equity, in cash, in exchange for removing their name from
the title.

Verify your cash-out re!nance eligibility. Start here (Mar 26th, 2023)

Cash-out re!nancing requires the home to have at least 20% equity. But you’ll need much
more than 20% if you are trying to transfer, say, 50% of the home’s equity.

Here’s how that might look:

Home value: $350,000

Current loan balance: $200,000
Equity: $150,000
Cash owed to spouse: $75,000
New loan (not including closing costs): $275,000 (pays o" existing $200,000 loan
and cashes out $75,000 to pay spouse)
Loan to value ratio (LTV): 78%

This scenario would qualify since you need 20% equity remaining in the home after the
re!nance (that’s a maximum LTV of 80%).

However, many homeowners don’t have this much equity in the home yet.

Though conventional and FHA cash-out re!nancing cap your new loan-to-value ratio at 80%,
veterans can use VA home loans to cash out up to 100% of their home equity.

Can you remove someone from a mortgage without

re!nancing?
It may be possible to take a person’s name o" your mortgage documents without re!nancing.
Ask your lender about loan assumption and loan modi!cation.

Check options to remove a name from your mortgage. Start here (Mar 26th, 2023)

Either strategy can remove a former co-owner’s name from the mortgage. But not all lenders
allow assumption or loan modi!cation, so you’ll have to negotiate with yours.

If neither is allowed, a re!nance may be your best and only bet.

Loan assumption

In theory, loan assumption is the simplest solution of all.

You inform your lender that you are taking over the mortgage, and want a loan assumption.
Under a loan assumption, you take full responsibility for the mortgage and remove your ex
from the note.

The terms and interest rate on the existing loan remain the same. The only di"erence is that
you are now the sole borrower. (And if your ex is the one who gets the house, your credit and
!nances are protected if your former spouse fails to make payments.)

Be sure to ask the lender if you can obtain a release of liability. This will eliminate your
obligation to repay the loan if your ex fails to.

The problem here is that many lenders won’t agree to a loan assumption. And lenders that do
agree may demand evidence that the remaining borrower can a"ord the payments.

Your ex may have to consent to the assumption, and you may need to submit a divorce decree.

In addition, a loan assumption isn’t free. It can cost one percent of the loan amount, plus
administrative fees of $250 to $500.

Loan modi!cation

Loan modi!cation allows you to change the terms of your mortgage loan without re!nancing.
A loan modi!cation is typically used to lower the borrower’s interest rate or extend their
repayment period to make the loan more a"ordable.

Typically, modi!cation is only allowed in cases of !nancial hardship. But some lenders may
accept divorce or legal separation as a reason for a loan modi!cation.

Call your lender or loan servicer to ask whether a modi!cation is an option for removing a
name from your mortgage.

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Selling the house

If neither borrower can a"ord the mortgage on their own, the only option may be to sell the
home.

Fortunately, there’s still a strong seller’s market in many parts of the nation, as housing has
been in short supply for some time. So it may be possible for home sellers to get a great o"er
on their property.

However, if real estate prices have fallen instead of rising, selling the home could be much
more challenging — especially if you recently bought the home and made the minimum down
payment.

If the mortgage is underwater, you may have to opt for a “short sale.” This is a property sale in
which the net proceeds don’t cover all the liens on the property.

If you’re unlucky, your mortgage lender can sue you for the di"erence between the foreclosure
sale proceeds and the loan balance. This is called a “de!ciency,” but in many states, lenders
can’t come after you for this. Even if the lender releases you from liability, your credit score and
your spouse’s will be negatively impacted by a short sale.

Tax implications of selling the home

Keep in mind that selling the home could create a new tax burden. Proceeds from home sales
can be subject to the capital gains tax.

You probably won’t owe capital gains tax if you’re selling your primary residence, but you still
might if you earn a lot on the transaction:

Up to $500,000 in pro!ts is tax-exempt for couples !ling jointly

Up to $250,000 in pro!ts is tax-exempt for individual !lers

These exemptions won’t apply if you’re selling jointly-owned investment property. In that case,
you could owe capital gains taxes on all proceeds from the sale. Your professional tax preparer
will know how to report your capital gains to the IRS.

A !nal (risky) option

There is one !nal option, but it’s risky and should only be used as a last resort.

You and your ex can agree to both stay on the mortgage.

This could work, especially if both people decide to continue living in the house. That way, both
parties have an incentive to stay current with the payments.

Otherwise, experts do not recommend this approach. If either person stops making payments,
the house could go into foreclosure and the credit scores of both will take a nosedive.

If you have no choice but to remain joint borrowers with your ex-spouse, seek legal advice from
an attorney !rst. An attorney may be able to help protect your !nances if your ex stops making
payments.

The !rst four options require more work, but the odds of a successful outcome are much
higher.

Removing a name from the deed

Regardless of which method you use to take your ex’s name o" the mortgage, you’ll also need
to get their name o" the deed.

You usually do this by !ling a quitclaim deed, in which your ex-spouse gives up all rights to the
property.

Your ex should sign the quitclaim deed in front of a notary. Once this document is notarized,
you !le it with the county. This publicly removes the former partner’s name from the property
deed and the mortgage.

Check options to remove a name from your mortgage. Start here (Mar 26th, 2023)

If you re!nance to remove the borrower, the title company will remove the spouse’s name from
the deed for you.

FAQ on how to remove someone from a mortgage

How can I get out of a joint mortgage?

Re!nancing will pay o" the joint mortgage and replace it with a new loan in your name only. You’ll
have to qualify for the new loan using your own income and credit history. You could also sell the
home to pay o" the joint mortgage. In some cases, your loan servicer may be willing to modify the
loan to remove a co-borrower or let you assume the loan for a fee, but this is far less common.

Can I remove my name from a mortgage?

To remove your own name from a mortgage, you and your co-borrower can ask the lender for an
assumption or modi!cation that would remove your name from the loan. If the lender won’t change
the existing loan, your co-borrower will need to re!nance the home into a new mortgage.

Does it cost to remove a name from a mortgage?

Yes. Re!nancing to remove a name requires closing costs, typically ranging from 2% to 5% of the loan
balance. A loan assumption usually requires a fee of about 1% of the loan amount plus processing
fees. A loan modi!cation’s cost will depend on your lender.

Can I remove someone’s name from a mortgage without re!nancing?

A loan assumption or modi!cation could release a co-borrower from your mortgage without
re!nancing into a new loan. However, lenders aren’t required to grant assumptions or modi!cations,
so be willing to negotiate.

Does taking one’s spouse o" the house deed automatically remove them
from the mortgage?

No. Removing a name from the deed will not change the borrowers’ names on the home’s mortgage.
The mortgage loan servicer will still hold both borrowers responsible for the debt.

What are today’s re!nance rates?

Average re!nance rates have bounced back from their historic lows of 2020 and 2021.

So, depending on your current loan, re!nancing to remove your ex’s name from the mortgage
could increase your interest rate. But you could still save money by shortening the loan term or
eliminating mortgage insurance.

To get the best deal possible, be sure to shop around with at least three di"erent re!nance
lenders. Compare rates as well as closing fees.

Time to make a move? Let us !nd the right mortgage for you (Mar 26th, 2023)

Authored By: Pete Gerardo

The Mortgage Reports Contributor

Pete Gerardo is a business writer whose work has appeared in The New York Times and
numerous trade magazines.

Updated By: Aleksandra Kadzielawski

The Mortgage Reports Editor

Aleksandra is the Senior Editor at The Mortgage Reports, where she brings 10 years of experience
in mortgage and real estate to help consumers discover the right path to homeownership.
Aleksandra received a bachelor’s degree in !nance from DePaul University. She is also a licensed
real estate agent in Arizona and a member of the National Association of Realtors (NAR).

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